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}\viewkind1\viewscale100\margl0\margr0\margt0\margb0\deftab80\dntblnsbdb\expshrtn\paperw12240\paperh15840\pard\sb0\sl-240{\bkmkstart Pg1}{\bkmkend Pg1}\par\pard\ql \li1440\sb0\sl-540\slmult0 \par\pard\ql\li1440\sb0\sl-540\slmult0 \par\pard\ql\li1440\ri1232\sb134\sl-540\slmult0 \up0 \expndtw0\charscalex96 \ul0\nosupersub\cf1\f2\fs48 Bankruptcy Judge Approves ResCap Deal With \line \up0 \expndtw0\charscalex97 FGIC \par\pard\ql \li1440\sb0\sl-276\slmult0 \par\pard\ql\li1440\sb23\sl-276\slmult0 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf2\f3\fs24 by Joel R. Glucksman on September 27, 2013 \par\pard\ql \li1440\sb0\sl-273\slmult0 \par\pard\ql\li1440\ri1390\sb14\sl-273\slmult0 \up0 \expndtw-4\charscalex100 A bankruptcy judge has approved a $596.5 million deal between Financial Guaranty Insurance \line \up0 \expndtw-2\charscalex100 Co and bankrupt Residential Capital LLC, putting an end to billions of dollars of claims \line \up0 \expndtw-4\charscalex100 associated with mortgage-backed securities. The settlement also resolved another $1.3 billion in \line \up0 \expndtw-4\charscalex100 claims related to trusts insured by FGIC, the former bond insurance unit of FGIC Corp. \par\pard\qj \li1440\sb0\sl-275\slmult0 \par\pard\qj\li1440\ri1297\sb11\sl-275\slmult0 \up0 \expndtw-4\charscalex100 The settlement faced significant opposition from holders of junior secured notes that were issued \line \up0 \expndtw-4\charscalex100 by ResCap, Reuters reports. The opponents argued that Judge Martin Glenn should have rejected \up0 \expndtw-4\charscalex100 the multimillion-dollar settlement because ResCap allegedly overestimated the amount it owed \line \up0 \expndtw-4\charscalex100 to bond insurer FGIC. The noteholders also asserted that the deal was not properly negotiated, \line \up0 \expndtw-5\charscalex100 Reuters added. \par\pard\ql \li1440\sb0\sl-276\slmult0 \par\pard\ql\li1440\sb9\sl-276\slmult0 \up0 \expndtw-2\charscalex100 Despite the opposition, the settlement is a step forward in the company's bid to exit its \par\pard\ql \li1440\sb4\sl-276\slmult0 \up0 \expndtw-4\charscalex100 complicated bankruptcy, and it will enable ResCap to escape FGIC's attempt to collect a \par\pard\qj \li1440\ri1377\sb0\sl-280\slmult0 \up0 \expndtw-4\charscalex100 projected $5.55 billion in claims. When the housing market was vibrant, FGIC insured a sizable \up0 \expndtw-4\charscalex100 amount of mortgage bonds for ResCap. Following the housing market collapse, FGIC claimed \up0 \expndtw-4\charscalex100 that ResCap misrepresented the home loans, which led millions of Americans to default on their \up0 \expndtw-5\charscalex100 loans and hold FGIC accountable for insurance payments. \par\pard\qj \li1440\sb0\sl-260\slmult0 \par\pard\qj\li1440\ri1420\sb18\sl-260\slmult0 \up0 \expndtw-4\charscalex100 In his 53-page opinion, Judge Glenn called the settlement "fair and equitable," and said the deal \up0 \expndtw-4\charscalex100 is in the best interest of investors who purchased mortgage bonds insured by FGIC. \par\pard\qj \li1440\sb0\sl-280\slmult0 \par\pard\qj\li1440\ri1405\sb4\sl-280\slmult0 \up0 \expndtw-2\charscalex100 "It will resolve significant claims against the estates for far less than the amounts asserted and it \up0 \expndtw-4\charscalex100 imposes a cap on FGIC's claims in case the contemplated plan is not confirmed," Glenn wrote, \up0 \expndtw-5\charscalex100 according to Dow Jones Business News. \par\pard\ql \li1440\sb0\sl-273\slmult0 \par\pard\ql\li1440\ri1291\sb13\sl-273\slmult0 \up0 \expndtw-4\charscalex100 ResCap initially sought protection under Chapter 11 of the bankruptcy law in May 2012, and it \up0 \expndtw-4\charscalex100 has since faced a number of obstacles and challenges in its multibillion-dollar bankruptcy \line \up0 \expndtw-4\charscalex100 proceedings. A hearing on confirmation of the company's proposed bankruptcy plan is scheduled \up0 \expndtw-5\charscalex100 for November 19, but Judge Glenn said the date may get pushed back. \par\pard\sect\sectd\fs24}